Free markets become fascism as the line between the private and public sector fades.

Often times it gets forgotten just why free markets are important. Free markets are the non coercive exchange of goods and services. On the contrary; every law, rule and regulation instituted by government is backed up by the threat of coercive force. What we currently live with in this country today are not free markets.

There is a partnership between industry and government. A revolving door exists between the decision makers in government and the executives in the so called private industries they regulate. Time and time again we see executives leave behind their high paying jobs to go work for the government, and vice versa. It isn’t long before they are making decisions bearing immense consequences for their former employers.

The free market system rewards those who take prudent risks and satisfy consumer wishes. Likewise those who cannot add value to the economy or take foolish risks are punished with losses. The result is a system in which only those who can efficiently please the picky consumer grow in influence. This is the magic of the profit incentive in the free market. Enter government and this all goes out the window.

The Federal Reserve causes the business cycle and Ron Paul knows it

Cut taxes, but cut government spending also.

President Obama yesterday unveiled his proposal to extend the Bush-era tax cuts that were set to expire this year. Also the estate tax will be set at 35% and the social security tax will be temporarily lowered from 6.2% to 4.2%.

While it is always a good idea to reduce the amount of our own money coercively stolen from us by the government, it begs the obvious question of how this revenue shortfall will be made up. How is it that a country that spent $1.3 trillion dollars more than it received this year could possibly lower taxes billions of dollars without reducing its spending by a similar amount? There is almost no mention of this tiny detail in the media.

Unfortunately the unproductive segment of our society, i.e. government, will not be shrinking to pay for these tax cuts. The money will be borrowed, same as it always is. Additional bonds will be issued and sold. The Fed will make sure all those bonds are purchased. It will expand its quantitative easing program to buy them with newly created money if necessary.